Problem

Kiley performed part of the work required by his contract with Daniels, then defaulted. Ki...

Kiley performed part of the work required by his contract with Daniels, then defaulted. Kiley’s work was, in part, very unsatisfactory. By agreement with the surety, Daniels had another contractor finish the job for $15,000 additional cost, and she also had this contractor replace Kiley’s defective work for $8,000. The face value of the performance bond was $25,000, and it promised “satisfactory performance by the principal.” Daniels presented the surety with a bill for $23,000. Can Daniels collect this sum? Explain.

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Solutions For Problems in Chapter 18